KUALA LUMPUR (May 29): ML Global Bhd, 56%-owned construction arm of LBS Bina Group Bhd, is placing greater focus on industrialised building system (IBS) adoption to help ease the shortage of labour in the company.

Its chief executive Datuk Richard Lim said ML Global has allocated up to RM40 million in the initial phase for the adoption of a pre-cast concrete manufacturing system from China.

"That [investment] will be enough to produce about 2,000 apartment units, which will be used in our upcoming projects by the first half of 2018," he told reporters after the company's annual general meeting today.

The adoption, Lim said, will further reduce the company's cost and reliance on skilled labour during the construction process.

"There are different groups of skilled labours. If you are short of one trade, you can't deliver your building. That is what we are facing right now.

"Using pre-cast concrete will greatly reduce our reliance on brick and plasters… That is one very immediate way that we [can use to] cut a lot of trouble looking for specific skilled labour," he added.

ML Global currently adopts aluminium shear wall system — one of many existing IBS — in its current projects. The new pre-cast concrete construction method, however, will further reduce construction time while complementing existing techniques, Lim added.

He noted that a weakness of pre-cast concrete is that it is tough to renovate on after it is completed. However, ML Global can alleviate this problem as it focuses more on high-rise projects, said Lim, which do not undergo major structural renovations upon completion, making it the best candidate for the system.

Once ML Global becomes affluent in pre-cast concrete manufacturing, it may eventually supply the manufactured parts to other companies in the long run.

"As for now, our upcoming projects will provide sufficient demand for us to adopt the system and manufacture them on-site," said Lim.

The company expects 2017 results to be better than 2016 on the back of a strong order book of RM2.6 billion, of which RM600 million has been delivered. "The remaining order book will keep ML Global busy for the next three years," said Lim.

ML Global's net profit fell to RM325,000 in the financial year ended Dec 31, 2016 (FY16) from RM10.17 million in FY15, dragged down by higher operating costs including corporate exercise expenses and impairments.

This was despite revenue more than doubling to RM92.53 million in FY16 from RM37.03 million in FY15, contributed by revenue from MITC Engineering Sdn Bhd which it had acquired last year.

In terms of tender book, the company is currently bidding for RM1 billion worth of projects in the country.

Instead of undertaking property development on its own, Lim said ML Global will complement its parent LBS Bina except for the RM270 million gross development value mixed project joint venture with Alaf Cahaya Development Sdn Bhd in Seri Kembangan, Selangor, it had announced in March.

Going forward, Lim said ML Global will continue to focus on affordable housing projects as part of its growth strategy because it is a "very sustainable market".

At 3.48pm, ML Global traded up one sen or 0.88% at RM1.14, with a volume of 852,400 shares, bringing it a market capitalisation of RM425.24 million. — theedgemarkets.com

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